Under GAAP, a Purchase by a Company of Its Own

question 322

Multiple Choice

Under GAAP, a purchase by a company of its own shares is recorded by

• A) a decrease in accumulated comprehensive income.
• B) a decrease in retained earnings.
• C) an increase in Treasury Stock.
• D) All of these answer choices are correct.

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Definitions:

Unearned Revenues

Money received by an individual or company for a service or product that has yet to be provided or delivered.

Accounting Period

A specific duration of time for which financial activities are reported and analyzed, usually a year or a quarter.

Salaries Expense

Represents the total amount paid to employees for services rendered during a specific period.

Salaries Payable

Liabilities for salaries that have been earned by employees but not yet paid by the company.